Amazon Won't Take a Loss on Kindle Fire But Will Actually Make $50 Profit Says UBM

Previously, several industry reports indicated that Amazon would probably be selling the Kindle Fire Android tablet at a slight loss, and would instead profit from subscriptions, appstore purchases & content delivery. Interestingly, according to the market research and consulting firm UBM TechInsights, that is not actually the case at all, and in fact, Amazon will probably make a profit of close to $50 per device. That amounts to a fairly healthy 25% profit margin. The company calculated this out by extrapolating the basic costs of the Blackberry Playbook with some of its features subtracted to better match the actual Kindle Fire. This actually makes sense, since the new Amazon tablet is basically the same hardware as the Playbook. Here's a quote from the BGR article with some more details, and the chart below breaks it down even further,

According to the firm, the 16GB version of RIMs PlayBook carries a cost of $170 per unit. Cut $10.50 for the camera system, $1 from the cost of radio components, 50% from the cost of memory since the Fire only includes 8GB of storage, and $2 from the cost of various sensors, and youre left with a $150 tablet that Amazon is selling for $199. Add to that profit from Amazon Prime subscriptions, Amazon Appstore app sales and money made from Amazons numerous other services, and the Kindle Fire is shaping up to be a solid moneymaker for the emerging tablet vendor.

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This tablet seems to be shaping up to be a fairly impressive product for Amazon. Share your thoughts.

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